3 stages of a medical practice lifecycle: From inception to scaling your practice
Starting your own practice is similar to raising a child. Initially, you are plagued by sleepless nights and dirty diapers. You pour in all your time and energy and try to answer their millions of repetitive questions. But before you know it, you are researching schools- trying to source the best options to assist in raising your child.
Medical Practice Maturity Model
When it comes to medical practice growth, there are certain stages that the practice goes through as time goes by. You have probably seen various business lifecycle or service cycle models published by academics or consulting firms. We have studied these theories and applied the knowledge we gained over more than a decade of serving small and medium practices across America.
Based on our research and experience, we have identified the different stages of growth of medical practices and created our own maturity model, consisting of three main stages.
These include the inception stage, the established stage, and the booming stage. In this article, we will go through each stage to illustrate its characteristics and possible strategies to follow to continue growing into the next stage.
Stage 1- Inception
The first stage is filled with emotion. There is the excitement about starting something new and the endless possibilities it offers, but it is also contrasted with anxiety caused by uncertainty. The pressure of financial uncertainty causes additional stress to the founder(s).
During the first stage, revenue takes a dip and could also go negative as startup costs are higher than the initial revenue generated. The practice still has a small patient base, but it is showing signs of slow growth.
The founder(s) have a short-term survival mindset, with the biggest motivators being cost reduction and patient growth.
Keeping the dream alive means sacrifice. The founders are focused on doing everything in their power to keep the business running, and that means putting in personal time to ensure the ship stays afloat.
During this stage, owners try to keep their fingers firmly on the pulse of the business and are involved in all facets of the business. It is characterized by micromanagement, and opportunity cost associated with time takes the backseat in many cases.
As the business begins to flourish, anxiety levels recede, and the founder’s mentality evolves.
Stage 2: Established
During stage 2, the practice is running smoothly, and revenue is moving further away from the red. It is characterized by stability which inspires the founder(s) to change their mindset from short to long term.
In certain cases, the founder(s) are content with the stability and revenue streams and do not pursue aggressive growth, process optimization, etc., but in most cases, this stage sets the platform for the founders to take their business to the next level.
Although reducing costs remains essential, the emphasis shifts toward growth and process optimization. Strategic thinking receives priority over operational micromanagement, and certain administrative tasks are delegated down the hierarchy or outsourced externally.
At the end of stage 2, founder(s) are more confident in the future of their business which gives them the freedom to realize the value of opportunity cost.
Stage 3: Booming
During this stage, the practice is doing very well, but there are fears that the business might stagnate soon.
During this stage, the business is running like a well-oiled machine which gives the owners the opportunity to focus on formulating long-term strategies to stay ahead of competitors. In most cases, expansion becomes a priority. It could either be the expansion of the practice’s capacity or expanding the geographical footprint of the business, or both.
Operational efficiencies, reputation management, strengthening the brand, and creating strategies to continue expanding the patient base enjoy priority. But the founder(s) are now well aware of opportunity costs and look for viable outsourcing options to assist in reaching their growth targets instead of taking everything on themselves.
How Neolytix can assist in creating sustainable growth throughout your practice’s lifecycle
Before we continue, if you have identified your practice as in the maturity model’s first growth stage, check out Neolytix videos. These are geared toward arming practice owners with the proper tools to achieve their growth goals.
Now let’s look at how Neolytix can assist along the journey of growing your practice.
Stage 1: Inception
Introspection is vital from the start. Neolytix provides consulting services from the inception stage, creating a foundation for your future growth goals. We’ll assist you in creating a brand that stands out from the rest, find your position amongst your competitors, and formulate long-term strategies to rise above the rest.
New practices simply can’t rely on referrals in the modern world. Neolytix assists in creating ROI-based digital marketing strategies to enhance the overall patient experience at your practice, leading to patient retention and a growing stream of patients.
It is very seldom that practice founders are tech experts too. Deciding on which systems, hardware, etc. to commit to is sometimes overwhelming. We’ll also assist in providing information and suggestions regarding the tech you need for your practice, from EMR/EHR systems to phone systems and apps.
Before a practice can provide medical care for patients, they need to be licensed. Neolytix provides licensing services across all 50 states for physicians, non-physicians, and services. From DEA licensing to CLIA licensing, we know what practices need and how to get them done fast.
Getting credentialed and becoming an in-network provider is a sure-set way to get more feet through your doors. We assist practices in getting credentialed with all payers, state and private. Once practices are fully licensed and credentialed, they focus on improving their billing cycle.
Neolytix provides bookkeeping and medical billing and coding services of the highest standard with strict monitoring and reporting that iron clads the billing cycle of practices. We also offer additional services to integrate these, such as benefit verification, VA services, recruiting assistance, etc.
Once the practice is ready to open its doors, it is time to spread awareness. From social media campaigns, ads on search engines, videos, and written content, Neolytix can create an effective high-reach campaign to promote your practice.
Stage 2: Established
This part of the practice’s maturity usually entails using the growth momentum generated as a platform to scale the business. Practise owners now focus on building policies and procedures to guide future scaling efforts.
As a medical practice grows, more hands are required on deck. Neolytix can provide candidates for consideration from their current database or source the perfect candidate according to the practice’s specific needs.
Virtual Assistants (VAs) with various skill sets are offered to provide service according to the times allocated by the practice. More technical remote services, such as helpdesk or IT support, are also provided.
Credentialing is an ongoing requirement for in-network providers. Credentialing for new staff and recredentialling for the current team must be administered to prevent delayed payments from payers. Neolytix can continue to provide these services from inception and on throughout the entire lifecycle of the practice.
If medical practices haven’t mastered their bookkeeping and billing processes yet, most practices will do so during this phase. Neolytix can assist in creating KPIs for the practice to monitor key processes such as billing, especially accounts receivable, providing an optimized balance between cost and performance.
Stage 3: Booming
During this stage, the practice is growing steadily. By now, most processes are optimized, running smoothly, and replicated when another branch is opened. Founders would’ve realized the benefits of outsourcing, the value of their own time, and the opportunity costs associated.
One of the challenges of a booming business is keeping an eagle’s eye on the operations. Improvements in management reporting and analytics on both the finances and processes are required to understand the business better and make sound decisions.
By understanding the business better from a systemic point of view, practices can create cost reduction projects. This is where Neolytix can assist with consultations, strategic formulation, and implementation of our services.
And, of course, as the business continues to expand, more people are needed. The skilled labor shortage in America will continue to be problematic until the end of the decade. Neolytix can assist in sourcing skilled labor for growing practices locally and internationally.
Practice tech Solutions and Neolytix offers a-la-cart services that include everything from billing to marketing and finances. Our services can assist you all along the value chain- from the patient’s first encounter to verification, billing, etc., to backend processes, through every stage of your practice’s lifecycle.
To find which of Neolytix’s a-la-cart services are perfect for your practice, schedule a no-obligation free consultation by completing the box below.